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Which of the following risks do not affect a pure debt fund Default by issuer on payment of interest or pirncipal Price fluctuations of the debt securities Share price movements Interest volatility 2. Which of the following is not applicable if the schemes of one mutual fund are taken over by another mutual fund The schemes' offer documents have to be changed and updated There is a change in the AMC of the schemes that are taken over There is a change in the sponsor of the schemes that are taken over The schemes have to wound up compulsorily 3. Which of the following is not an advantage of a mutual fund Professional management at lower costs Diversification of portfolio Liquidity None of the above 4. Who is the primary guardian of unit holders funds? The AMC The Sponsor The Trustees The Custodians 5. CDSC stands for Contingent Deferred Sales Charge Commission and Discounts Structure Committee Commonly Disclosed Sales Commission Compounded and Discounted Sales Commitment 6. Some closed-end funds are quoted at a discount to their NAV because Of high expense ratios Investors do not expect the current NAV to be sustained in future The repurchase price fixed by the fund in lower than the NAV Of the inherent risk involved in investing in such type of funds 7. In India, Mutual Funds are formed as A public limited company A trust

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A private limited company A society 8. The fund sponsor has to contribute Nothing to the AMC The total networth of the AMC Atleast 40% of the AMC's networth Exactly 50% 9. AMC has to file its annual statements with Association of Mutual Funds in India (AMFI) Registrar of Companies (RoC) Agents' Association UTI 10. A Self Regulatory Organisation can Regulate all entities in the market Regulate only its own members in a limited way Regulate its own members with total jurisdiction Regulate no one 11. The responsibilities of a unit-holder do not include Monitoring his investments carefully Being aware of information that affects his investment in a major way Carefully studying the offer document Taking decisions about where the fund managers should invest 12. UTI Cannot Provide corporate finance Engage in real estate and property development business Provide merchant banking services Invest in securities 13. The offer document issued by mutual funds does not serve the purpose of Announcing the launch of the scheme Giving detailed information about the scheme Explaining the risk factors of the scheme Giving the fund manager's investment outlook for the next quarter (1-Mark) (1-Mark) (1-Mark) (1-Mark) (1-Mark) (2-Mark)

14. A compliance officer Certifies that the information information contained in the offer document is true and fair Belongs to SEBI Cannot certify that the AMC's legal and procedural obligations are fulfilled Cannot be appointed by the AMC 15. The risk of a scheme's NAV moving up or down on the basis of capital market movements is An investment attribute Scheme specific risk Standard risk Credit risk

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16. For assured return schemes, information about the guarntor's net worth (2-Mark) which justifies the guarantor's ability to meet any shortfalls in the returns assured under the scheme can be found in The offer document The key information memorandum Both a) and b) None of the above 17. In the offer document, funds are required to make disclosures regarding (2-Mark) the financial results of the sponsor for the Last one financial year First 2 financial years Last 3 financial years Last 2 calender years 18. Past performance of a sponsor/AMC mutual fund is not indicative of the future performance of the scheme. This is Not true A standard risk factor for all schemes A scheme-specific risk factor Applicable only to gilt funds 19. The offer document for a scheme remains valid even if The AMC is reconstituted Entry or exit loads are changed The scheme's NAV changes New plans are added to existing schemes (2-Mark) (2-Mark)

20. An agent can offer and sell a funds's units at Any price he chooses A price determined by competition among agents A price based on demand for that fund's units The public offering price currently in effect 21. The most important link between Mutual Fund and Investors is Government SEBI Fund distributors AMFI 22. The following are not termed as "sales practices" Agents commission Before-and after-sales service to investors Advertising of schemes Stockbroking 23. Trail commission means paying No commission at all The entire commission up-front Commission in phases during the holding period of investor The entire commission after five years 24. For a open ended scheme, the repurchase price can not be Lower than 93% of the NAV Lower than 93% of the Sale price Both (a) and (b) None of the above 25. Which of the following is not true above dividends of a mutual fund Dividends are taxfree in the hands of investors Debt mutual funds have to pay dividend distribution tax Dividends can be paid out of unrealised profits of the mutual funds Equity mutual funds do not have to pay dividend distribution tax

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26. When computing NAV of fund SEBI requires accrual of major expenses to (2-Mark) be accounted Quarterly

Annually On a day to day basis When actually paid 27. For a closed end scheme, initial issue expenses Can be amortised over a period of 10 years Can be amortised over a period not exceeding 5 years Can not be recovered from investors Can be amortised over the life of the scheme 28. As per SEBI regulations for valuation of investments held by mutual funds, a security is considered "non-traded" when it Has not been traded for 60 days prior to valuation Has not been traded for 30 days prior to valuation Is not listed on any stock exchange Is held by the mutual fund without buying or selling 29. Each investor is mandatorily required to give details of which of the following in his application form Nominee E-mail Address Bank Account PAN 30. The maximum number of joint holders can be 2 3 4 Unlimited 31. Investment policies of a mutual fund are determined by The fund manager The AMC management The marketng department based on what distributors want The investors 32. Certificates of Deposits (CDs) are issued by Regional Rural Banks Corporates Scheduled commercial banks (1-Mark) (1-Mark) (2-Mark) (1-Mark) (2-Mark) (2-Mark)

None of the above 33. The largest proportion of trades done in the wholesale debt market is accounted by Mutual funds Foreign banks Indian banks Financial institutions 34. When expecting a fall in market price, fund managers can reduce the loss (1-Mark) in portfolio value by Speculating Not buying and selling shares at all for some days Using equity derivatives Giving TV interviews to improve sentiment 35. Coupon of a debt security refers to A piece of paper attched to the certificate The return on investor would earn The rate of interest paid on par value of the bond None of the above 36. A put provison in a debt issue allows Investor to put away the certificates in safe deposit vaults Investors to redeem debt prior to maturity Issuers to redeem debt prior to maturity Investors to extend the tenure of debt 37. When interest rates for similar maturities' bonds are 11%, bond with a 9% (2-Mark) coupon rate will sell Above par Below par At par At a price unrelated to the interest rates for similar securities 38. A mutual fund may transfer investments from one scheme to another Not at all At current market rates At cost price At a fixed premium over market rate (2-Mark) (1-Mark) (1-Mark) (1-Mark)

39. Dividend yield for a stock is Dividend per share Dividend per face value Dividend per share to current market price None of the above 40. The Price/Earnings (P/E) Ratio is calculated using Market price and dividend Market price and earning per share Market capitalisation and dividend Market price and face value 41. When comparing fund performance with peer group funds The age of funds should be same The AMCs should have same networth Size and composition of the portfolios should be comparable All of the above 42. The most suitable measure of fund performance for all fund types is NAV Change Total Return Total Return with dividend reinvestment method None of the above

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43. The Income Ratio as a measure of a fund's performance is defined by the (1-Mark) fund's Total income and total assets Net investment income and net assets Total income and net assets None of the above 44. To evaluate a closed-end debt-fund, a suitable benchmark would be BSE Sensex I-Sec's I-BEX Interest on bank fixed deposits of similar maturity S and P CNX Defty 45. The Income Ratio as a measure of a fund's performance is defined by the (2-Mark) fund's Total income and total assets (2-Mark)

Net investment income and net assets Total income and net assets None of the above 46. Assets under management of a fund at the end of year are 125 Cr.The Average Net assets of the fund are Rs. 100 crore and the total expenses of the fund in that year are Rs. 2.5 Cr. What is the expense ratio? 2.00% 2.50% 1.25% 25.00% 47. Beta co-eficient is a measure of Market risk Total risk Credit risk Re-investment risk 48. Listing of shares at a stock exchange ensures Guaranteed returns Long term capital appreciation Low risk High liquidity 49. Financial planning is relevant for High networth individuals Older clients Tax and estate planning All of the above 50. Why should one buy an insurance policy? It gives high current returns It gives good capital appreciation over its term It should be bought due to the need for insurance and not as an investment All of the above 51. Running a money market mutual fund requires more of Credit analysis skills Equity analysis skills (1-Mark) (1-Mark) (1-Mark) (1-Mark) (2-Mark) (2-Mark)

Patience Trading skills 52. A sectoral fund is a Low risk fund Moderate risk fund High risk fund Low-to-moderate risk fund 53. Which of the following is untrue for Public Provident Fund Schemes The interest is tax-free Post-tax returns are attractive Liquidity is rather low None of the above 54. There is no contractual guarantee for repayment of principal or interest to (1-Mark) an investor in Bank deposit Debt fund Secured debentures All of the above 55. Asset Allocation is Keeping certificates of the physical securities in proper places Allocation the available money to all the securities available Allocating the right proportion of funds to equity, debt and money market securities None of the above 56. Deciding on strategies such as cost averaging, value averaging, active switching, all depend on the Stock market situation on date Amount of money to be invested Investor's risk tolerance Phase through which the economy is passing 57. Most individuals invest in life insurance policies for Rrisk protection Tax benefits Easy liquidity (1-Mark) (1-Mark) (1-Mark) (1-Mark) (1-Mark)

High returns 58. Which of the following is not an advantage of bank deposits? Liquidity High perceived safety Low entry price High yield after tax 59. Ex-Marks of an equity fund measures its Performance Risk Both the above None of the above 60. Circumstances that might cause an investor to change the composition of his portfolio Cyclical changes in economy Unforeseen economic changes affecting the portfolio's preferred sectors Both the above None of the above 61. A criticism of rupee-cost averaging is Investment is for the same amount at regular intervals Over a period of time, the average purchase price will work out higher than if one tries to guess the market highs and lows It does not an investorwhen to when to buy, sell or switch from one scheme to another Rupee cost averaging has no serious shortcomings 62. To reduce interest rate risk a debt mutual fund investor should invest in Funds having higher yields Funds having lower average maturity Funds having higher average maturity Funds with lower expense ratio 63. Which of the following is the first step in financial planning Asset Allocation Selection of fund Studying the features of a scheme Setting up financial objectives (2-Mark) (2-Mark) (2-Mark) (2-Mark) (2-Mark) (1-Mark)

64. Of the following, which type of fund would have a higher P/E multiple in comparison to the average market multiple A Value Fund A Growth Fund An Index Fund Could be any of the above three, one cannot generalise 65. The amount an insurance company would pay to the nominee if a policyholder died is known as the Premium Sum assured Face value Real value 66. Volatility of an equity fund portfolio is independent of the Kind of stocks in the portfolio Degree of diversification of the portfolio Fund manager's success at market timing Number of investors in the scheme 67. A very high proportion of investment in all types of equity funds is advisable for investors In distribution phase In accumulation phase In transition phase Who are wealth preserving affluent individuals

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68. Which of the following lets an investor book profits in a rising market and (2-Mark) increase holdings in a falling market Fixed Ratio of Asset Allocation Flexible Ratio of Asset Allocation Investment without any asset allocation plan Buy and Hold Strategy 69. If yield is expected to fall, a debt fund manager will do all of the following (2-Mark) except Sell short maturity securities and buy long maturity securities See that the fund's average duration becomes longer than the market's average duration Sell long duration securities and buy short duration securities Sell high coupon securities and buy low coupon securities